Fitch's Ratings Service threatens to downgrade the US credit rating while PepsiCo and Bank of America post strong earnings. Twitter chooses its IPO date while Butterfinger takes on Reese's Peanut Butter Cups.
US debt rating put on watch
Fitch Ratings warned that it could strip the US of its top credit rating and downgrade the country's credit rating by the end of the first quarter of next year. According to the Wall Street Journal, even if the Congress reaches a short-term deal, Fitch says the budget impasse has undermined confidence in the effectiveness of the US government and its economic policy. Fitch is only one of the three biggest credit-rating firms. Standard and Poor’s does not expect to change its rating and Moody’s also indicates a downgrade is unlikely.
Bank of America has strong earnings due to improved credit quality
Bank of America’s third quarter profit surged because the bank benefited from sharply improved credit quality that offset weak fixed income and mortgage banking revenue. The bank reported a profit of $2.5 billion versus a profit of $340 million a year earlier. The core consumer and business banking unit reported a profit of $1.78 billion compared to $1.35 billion a year ago. Credit-loss provisions were down sharply to $296 million compared to $1.77 billion a year ago.
PepsiCo’s profit up due to munchies
PepsiCo Inc reported a higher-than-expected profit for the third quarter due to stronger sales of its Frito-Lay snacks. According to the Associated Press, PepsiCo receives more than half of its revenue from food. In is beverage unit, revenue slipped as higher prices failed to offset a 4 percent volume decline. Some shareholders are urging a spin-off of the beverage unit. In the third quarter, PepsiCo earned $1.91 billion, or $1.23 per share. That compares to $1.9 billion and $1.21 per share a year ago.
Twitter chooses NYSE and plans on November 15 for IPO
Twitter has chosen the New York Stock Exchange for its much buzzed about IPO and has selected Friday, November 15th for the date. CNBC reports that tech companies have traditionally listed on the Nasdaq, but recent glitches and the disastrous Facebook IPO, have made more companies think about the NYSE. The roadshow to determine pricing is set to kickoff on October 25. The actual date can remain somewhat fluid. Underwriters may choose to launch the IPO a week earlier. The stock will trade under the ticker symbol “TWTR”.
Butterfinger takes on Reese’s
Hershey’s Peanut Butter Cup, the nation’s top selling candy bar, is about to have a new competitor, the Butterfinger Peanut Butter Cup. According to USA Today, Nestle is so confident that the Butterfinger Peanut Butter Cup will be a hit that it has purchased a Super Bowl commercial to promote it. WalMart and Trader Joe’s have tried to promote a privately branded peanut butter cup with limited success. The new Butterfinger Peanut Butter Cup will have the crunch of a Butter Finger but will be in smaller portions. The new slogan will be “The cup just got crunchy.”
Catherine S. McBreen is President of Millionaire Corner. McBreen plans and develops content for Millionaire Corner. Catherine balances editorial content to meet the informational needs of both new and seasoned investors. She designs special monthly surveys on topical issues affecting the economic environment.
McBreen has a B.S. in speech communications from Northwestern University and a J.D. from DePail University College of Law. She is a member of the American Bar Association, the Illinois Bar Association, and the Chicago Bar Association.
Well-known for her expertise in the affluent and retirement arenas, McBreen is a frequent speaker at industry conferences. She has been quoted widely by the financial media, including The Financial Times, The Wall Street Journal, Research, Private Asset Management, On Wall Street, Reuters, Bloomberg News, The Dow Jones Newswires and Worth. Cathy has appeared as a guest on CNBC Closing Bell, First Business Morning News, Neal Cavuto at Fox Business News, ABC and CBS radio.
McBreen is co-author with Spectrem President George H. Walper, Jr. of the book "Get Rich, Stay Rich, Pass It On: The Wealth-Accumulation Secrets of America's Richest Families" (Portfolio, January 2008)
Catherine is the mother of four and is involved in many school and community events.